The Problem With Net Neutrality

The FCC's proposed net neutrality regulations, the most common errors in the debate on wealth in America and next week's Senate primary and what it means for the Republican Party.

This transcript has been automatically generated and may not be 100% accurate.

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I ... the ... welcome to Opinion Journal why Mary Kissel ... the mutations Commission voted Thursday to give itself the power ... to decide what price is broad and regulators can charge for their services ... about Business World columnist Holman Jenkins Junior on the line moment ... by the court said that the FCC could do this what is Chairman Tom Wheeler trying to achieve ... who is trying to satisfy the net neutrality ... in which a moment then into thousandeight ... promising championed as the media unit pace in search of work on as they say but he's trying to fill the Obama campaign promise that the same time you try not to up the internet ... it seems like he might end up doing either ... the man and a slow ... on the local pro well ... because of a key to open a can of peas here this is still up for the rest of the ministry ... nothing is needed so that probably the thing in some ways because there is no net neutrality regulation now and we know it and this political stalemate will keep it that way for some time to come ... but we haven't editoral this morning's paper called the Internet's fifty one new regulators ... up on the day it seems from reading that that ... this rule keys on the word a reasonable one is reasonable pricing ... and not get the arbitrary cuts and yet it has less to do with pricing to the end user in India too ... pricey to upstream suppliers of content you to earn a lead ... who might be willing or and used to pay more to deliver their services and users ... right now ... that's considered a violent into two thousand since no net ... neutrality rules that exist ... at all ... it's coming from you that they will tell April brought any ... of that but then the FTC time to regular ... so how well companies like Google and Netflix react to this halfway house of a compromise that Mr. Wheeler's proposing ... well if you get past that we learned that the four are worrisome thing is that he has been constantly ... bringing down fall on ... the restyled utility regulation on the internet ... it's not clear yet whether the rules and he added ... that ... Netflix's and people are behind him out and if they are to become the really ... ugly political battle in ... the past you can really tell but investment in greater and faster broadband for awhile so people see it a step to the store isn't the ... only to be optimistic anymore so consumers want ... their broadband in their their Netflix when they wanna know what the force of that demand ultimately pushed the agency ... away from its net neutrality and yes that is exactly the issue here they basically wanted a time honored rule you know that he broke don't fix it ... it isn't broken people ... demand on the filter access to the Web to their broadband accounts and and so why is it so it's a very well to get into this no win and it's grown to two great spotted ... by biting his tongue in the way that the net neutrality folks there ... all we call that Obamacare for the Internet in the editorial our mostly because it's so nebulous such a bet that I see a ... bump in his role comes on the day is you here ... thank so much for joining us ... the Obama administration is pushing the scene of the income inequality in the run-up to the November midterm elections ... but sometimes the White House and Democrats played pretty fast and loose with the facts ... it combines three of the biggest fallacy is ... is American Enterprise Institute visiting scholar and an art ... the author of unintended consequences so and ... what's put up that the very first fallacy up on the screen and I quote ... the six sets of the one percent has come at the expense of the middle class why is this true love the the left isn't very good job of inflating the forces are at work that are driving the incomes of different groups ... so if you look at the top ... the Indian information technology the internet and access to global markets have really opened up an enormous number of investment opportunities ... there's a shortage of properly trained talent that drives up the wages ... and the fact that Europe and Japan have been able to compete in this area just makes a shortage that much more acute ... if you look at the other end of the spectrum coming out of the nineteen fifties and sixties there was a dearth of birth in the great depression ... that led to a shortage of labor and you had ... people moving off the farms in the cities which are much more productive than in manufacturing jobs that were very productive we saturated the population ... was educations at Provo productivity ... I have no optimal access those low costs for labor at the time ... a lot of that he was all changed today with today we have enormous surplus of labor ... we have a ... baby Boomers entering the workforce we airing women increasing their participation with an enormous migration in the United States the run enormous trade deficit ... with with a huge surplus of labor ... of competing for middle-class and ... working class jobs ... and that really has held down ... of middle-class wage is ... completely independent of what's happening at the ... top end of the apple of the way that's a very complicated knew he wants picture meant that the SEC and ... a fallacy and I quoted that ... the success of the one percent only benefits the one percent and ... I'm there I think it at about the argument is really good you lived there the has no spillover effect of the middle class but ... there are two ways in which it to ... you when you look at today's economy which would include down to the world wage because there's much more interconnectedness with the world ... I think ... the only thing to drive the wage up its local demand ... and and where is the growth of local demand coming from is coming from innovation which is being driven by the success of our ... of our up one percent ... and that has put enormous it up the pressure back to drive the wages of away from the other of the world wage would you look there ... that force can take to affect the key to drive up employment what can drive of wages will we because of this migration and increase and one we had a huge increase in employment for in quickly on to the third because let's talk about this next in in the full Senate there's a part of plan ... to widen distribution of income as reduced ... upward mobility yet he lived in the ... Chadian Sen's of which is the last large ... analysis of social mobility circumference is only twelve of them on the left I might add ... I have really come to the conclusion that mobility has not changed at all relative mobility subpoena twentieth percentile its probability ... you get the sixtieth percentile but the effect of that has been the increase absolute mobility ... if you look from their study at the probability of state making a hundred thousand dollars ... everybody across all points in the income distribution their probability has gone up for every for every level of wages so absolute mobility has risen ... relative had stayed the same if you ... compare us to Europe what you find is that ... we have ... mobility that identical to say Denmark except for the lowest twenty percent when you look of the lowest twenty percent you find ... a lower test scores higher dropout rates ... many more fatherless children much higher crime rates and so you really have to ask yourself is the economics which is causing those problems which are getting in the way of mobility or other other sociological issues which are having effect there but I think it's difficult to make the leap to ... the pop economics is what's driving the problems of can AEI is a scholar and can art ... welcome back to Opinion Journal why Mary Kissel ... the conversation now about income inequality and the one percent ... with American Enterprise Institute visiting scholar at Connor's ... and ... the one percent gets blamed for profiting at the expense of the middle class ... is true ... I don't believe that it is because I think really the way the ... but the growth in demand was to manifest itself in the middle classes either through employment growth for ... a wage growth ... and what we have seen is enormous employment growth so the US the labor force grew by fifty percent since nineteen eighty ... Germany and France from less than half as much depend less on the third ... over that period of time and so ... we really have a choice which is a cut of restricting the supply of labor and driven up the wages or we could expand the supply of labor in awe lot of migration into our our workforce in order to satisfy those of those jobs and those immigrants created a lot of companies that awesomely cups right yes or no doubt about that okay but this issue of wage stagnation gets a lot of attention ... on his immigration mostly the reason for that is that why we see the wages at the top going up and I just in the middle I think it is that even if you make a comparison Europe are wages you don't forget we grew unemployment ... with wages median wages median incomes that war twenty to twenty five percent higher than Europe and Japan ... um and when you look of the growth in those wages to grow about forty percent since nineteen eighty it's in line with that of France and Germany for example ... at the meeting we grew much faster above ... and pretty much the same below but our growth rate was in line when you factor in ... health care and and things like that ... and so we were able to grow in line at wages that were much higher introduced twice as much employment growth during that period than they were able to produce and ... having not had us innovation ... with you look at the contribution conditions very much to do the nine states ... the role wouldn't even slower on a relative basis here you mention in the last segment income mobility ... um ... what are the forces shaping income mobility should we be concerns ... that its size easy today it's ago from the lowest rung of society up to that one person but I think what's what's that Apple at that stage shore but in this way ... it used to be that would reset the we didn't have a lot of education especially the population education on a lot of capable ... people became a lot more productive as a result of Education which pretty much saturated now haven't changed the education technology ... and so we're still teaching everybody ... American history and literature and things like that when ... we have to probably transition now ... to ... an education system which is ... really driven an increase in the productivity of our workforce and not just giving the general education that we were giving them in the nineteen ... fifties and if you look ... in in in the sixties and seventies were spun like thirty percent of the college graduates rated A Arnett increases only about ten percent and of course that stepping back big picture one the one percent profits ... how does that affect the ninety nine percent in terms of providing jobs and opportunities now the one percent of its bite you lay our economy works is ... you buy things that are worth more than the cost ... so what might pop and Baidu every valued feel it's worth Guardia then I charge you when that happens I get ... very successful as result than if I could give you something like Google ... or an I phone ... postings EU consumers again a ... snap shot wide because they're way more valuable and so when you really look at the amount of of profit is being made by the investors in these ventures ... it's very small in comparison to the value of ... that to consumers said Philip in Google's consumers paid almost nothing giving up a little privacy ... to school but it's having enormous valuing huge increases in the productivity ... of our workforce especially are most productive ... portion the workforce knowledge base piece of our workforce ... and consumers get that for free they get ... mm of bow Micra soft and Apple software for a couple hundred dollars ... it's it's immensely valuable I've been on the order of magnitude of ... of a car which is way more valuable to cough so in other words consent denouncing the one percent we should be thanking them I would think it's our only chance at this point to drop out of the day at Disney scholar and author and canard thank so much ... for joining us ... you can follow us on Twitter or email us at Opinion Journal lived at the beest dot com ... and check this out on the beest dot com later today with a special segment ... with Kyle Wingfield on a LAN aam and Tots Georgia Senate race ... I'm Mary Kissel with The Wall Street Journal editorial board ... have agreed we can ...